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(nested layers of a firm's environment (industry environment (how to…

- - - - narrow or broad
  - - - Political
        
        transportation and energy policies like gas power
      - Economic
        
        continues growth, economic stability, exchange and interest rates
      - Sociocultural
        
        western lifestyles, green living
      - Technological
      - Ecological
      - Legal
- - - - lose customers, where they go
      - get customers, where they come from
    - - just a normal disruption from potential competitors that come into the market.
- - - - changes in structural attributes over time
    - - As a manager
        
        generally prioritize doing something about – weakest of the five forces.
        
        at the very least closely monitoring – the weakest of the five forces.
      - ex: airline industry
        
        pivotal force:rivalry
        
        a few major mergers
        
        increase industry concentration
        
        yield management
        
        reducing the need to slash prices to fill all those empty seats
      - the weakest of the five forces
    - - as the conceptual opposite of substitutes
      - value adding compliments can increase industry profits
      - co-opetition
        
        simultaneously cooperate and compete
- - - - meet similar needs
      - better cost structure
      - more innovative or value providing
    - - low industry concentration and product differentiation, high fixed or storage costs for the product or service, slow demand growth and high overcapacity and high exit barriers
    - - entry barriers
        
        scale economies/ scope economies
        
        learning curve economies
        
        capital requirement
        
        product/ service differentiation
        
        access to distribution channels
        
        expected retaliation
  - - - set of similar firm associated with a single product-market
      - problem：unclear industry boundaries
    - - help managers make decisions about resource allocation, which is one of the key functions of strategic management
        
        entry and divestment decisions across an entire portfolio of product markets
      - where and how they can intervene strategically to improve the attractiveness or profitability of their industry.
      - powerful tool that provides deep insights into the reasons why industries are more or less profitable
        
        industry attractiveness
    - - Industry structure
        
        product differentiation, the nature of buyers and sellers, barriers to entry and switching costs
      - Firms' conduct
        
        advertising, pricing, capital investment, and bargaining,
      - performance
        
        economic profits